The Senate Judiciary Committee held a hearing on Dec 1, 2021 to consider the nomination of Kathi Vidal to be Director of the USPTO. Inventors are concerned. Vidal’s clients have filed a combined 2,381 challenges at the PTAB. She has been paid millions of dollars by Apple, Samsung, Microsoft, Cisco, Micron, Netflix, Dell, Roku, and HP. She is attorney-of-record in 14 pending cases at the PTAB, all on behalf of the infringer/petitioner. She is a litigator from Silicon Valley, a culture devoted to destabilizing the patent system out of fear of inventors with competing technologies.

The combination of the 2011 America Invents Act and the Supreme Court decision in Arthrex this past summer have vested near-total power for the USPTO Director to decide ownership of more than a trillion dollars worth of intellectual property. The legal structure is such that the Director can revoke any patent through the PTAB review system – directly, by informal procedures, or by influencing the patent invalidation judges. The official record will include a statement that “it would have been obvious to a person of ordinary skill to combine [this and that] prior art”, but whether or not that analysis attaches to any given patent is a result of policy, pressure, and feelings shaped by the Director.

Vidal was included in a hearing with 4 other witnesses, so she got very few questions.

Due to the compressed hearing Grassley, Leahy, Tillis, Klobuchar, Coons, and Hirono were the only Senators to put forth questions. Senator Whitehouse staunchly advocated for the right to a jury trial under the 7th Amendment, but unfortunately failed to realize that is precisely the problem with the PTAB and did not solicit a response from Vidal.

Kathi Vidal Positions

Vidal stated that patent eligibility confusion under Section 101 needs to be clarified, either by legislation or by the Supreme Court. She said the current guidelines at the USPTO are working, but need constant attention “to ensure that guidelines are consistent with the law and promoting innovation.” Do to the brevity of her comments, she did not reconcile how the guidelines can be working when most of the judges on the Federal Circuit refuse to abide by them.

Vidal went along with Leahy’s complaint about patent thickets and did not dispute his assertion that patent abuse contributes to high drug prices. She said that she’s heard that some drug companies obtain patents on marginal improvements like “changing the color of a particular drug”.

Without taking a clear position, Vidal agreed with Leahy and Tillis that the Fintiv guidance at the PTAB isn’t working. Inventors don’t think it’s working either, but for different reasons. Vidal seemed to agree with Leahy and Tillis that the PTAB should institute reviews even when it interferes with a first-filed case in an Article III court. She was clearly committed to working on PTAB institution policy, but did not answer what or how. This is cause for concern.

Finally, Vidal broke the news the PTAB is working on a pro bono program for the PTAB. However, she seemed to indicate that it would be for the benefit of patent challengers (rather than inventors) stating that “small entities need as much access to the PTAB as anyone else.” Inventors don’t want access to the PTAB, we want a fair trial with an independent judge and jury and due process!

Senators Positions

We also learned about what is important to the Senators.

Senator Leahy complained that the PTAB too often defers to district courts based on erroneous trial schedules. He believes that district courts should defer to the PTAB, not the other way around. In addition he endorsed statements by FDA officials that patent abuse contributes to high drug prices, but it was unclear what he expected the USPTO Director to do about it.

Senator Hirono focused on diversity – measuring and increasing participation by women and minorities. Unfortunately, she failed to mention the feedback from the inventors who testified at the SUCCESS Act hearings that the PTAB was the main obstacle to their ability to participate.

Senator Klobuchar asked the best question of the hearing, indicating the she recognizes that small businesses are treated unfairly, “how can PTO strengthen PTAB while preventing well-financed companies from abusing the process to impose cost and delay on small innovators?” Vidal may have mixed up her talking points, as she answered that the USPTO is launching a pro bono program to help small entities access the PTAB. It is concerning that Vidal flubbed this question and has no serious plan to respond to the extensive petitions, comments, testimony, and lawsuits asking the UPSTO to pass regulations to fix the problem raised by Senator Klobuchar.

Senator Coons was concerned about Standard Essential Patents policy, collaboration on international IP, and urging that the “PTAB must continue to strike the balance between strong patents and providing a review mechanism for improvidently granted ones.”

Senator Tillis continued his focus on Section 101, stating that “patent eligibility jurisprudence is in shambles”. He proposed adding a new requirement that only “technological” inventions should be eligible for patenting, presumably a replacement for the “abstract idea” judicially created exception.

The biggest concern of the hearing for inventors was that Tillis joined Coons in asserting that the PTAB has already been fixed! That’s not true at all. Former Director Iancu’s efforts to that end were thwarted, and the PTAB remains a death squad for inventors. It is distressing that the two Senators with a reputation for being pro-patent, are listening to corporate lobbyists rather than paying attention to what is happening to actual innovators at the PTAB day in and day out.

Open Issues

Vidal’s big tech resume does not automatically disqualify her. But we have a lot of questions, few of which were asked, and none of which were answered in the abbreviated hearing. We are hoping that Senators of the Judiciary Committee will step up to ask these important questions, such as:

• Will you rescind the delegation of the institution decision to the PTAB, and provide personnel and regulations that to jeopardize a previously granted patent are careful, competent, and free of pecuniary interest?
• Will you prescribe regulations to prohibit filing multiple petitions against the same patent at the PTAB?
• Will you prescribe regulations to deny institution where a PTAB trial would add expense or delay, or lead to determinations in conflict with a first-filed district court case involving the same patent?

Along with a number of other critical questions that will demonstrate her understanding of the problems and commitment to reform.

Next Steps

There is one week for committee members to submit written questions, to which Vidal will return responses, then a committee vote, then a vote by the full Senate. There really isn’t time for this to be done properly before the end of the year, especially with all the other pressing matters in Congress. We urge Chairman Durbin and Majority Leader Schumer to not rush a vote, but allow time for her to work with the committee on the issues and commit to a plan for repairing the damage at the USPTO.

Inventors need to be involved. For better or worse, the Director of the USPTO has the power to make or break the patent system. Join US Inventor and meet with your Senators to explain how – with the PTAB – the USPTO is taking the wrong side of patents.